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Videogame Stock Roundup: E3 Expo Buzz; Facebook & ATVI Unit Team Up for Live Streaming Games

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The video game space is currently abuzz with excitement surrounding this year’s Electronic Entertainment Expo (E3), which kicks off on Jun 14 in Los Angeles. Apart from E3, another big story this past week was the partnership between Facebook and video game publishing giant Activision Blizzard to live stream games.

1. Hosted by Entertainment Software Association (ESA), E3 is an annual video game industry trade show. E3 2016, a three day event will kick off on Jun 14 at the Los Angeles Convention Center. However, this year’s Expo will be a tad different from previous years given that top notch publishers like Activision and Electronic Arts (EA - Free Report) have decided to pull back from the show. Instead EA will host a similar standalone fair just across the L.A convention center and simultaneously in London from Jun 12 to Jun 14.  The event will be called EA Play. Reportedly, the company is expected to showcase titles like Battlefield 1, Titanfall 2, Mass Effect Andromeda, Madden 2017, NFL and NHL 2017 along with games set to release over the next two years.

Though Activision has refrained from organizing such an event, the absence of the two top participants at the fair might put a question mark on the Expo’s future, opine some analysts. They fear that other video game publishers might also start following EA’s footsteps. Also, The Walt Disney Company’s (DIS - Free Report) announcement of a no show at the Expo will mean another less high profile booth. Video game publishers participating in the event include Bethesda Softworks, Ubisoft, Square Enix, Take Two Interactive (TTWO - Free Report) , Koei Temco and Sega.  

Despite its share of problems, E3 2016 has lots to offer. Microsoft Corp (MSFT - Free Report) has already labelled this year’s E3 as “special”. Therefore, we can expect a lot of new games and possibly “multiple new streaming devices” along with a speedier and slimmer new Xbox version at the Expo, rumors of which having doing the rounds for quite some time. Hardcore gamers are already thrilled at the idea of a PS4 that is compatible with 4K gaming and virtual reality and Sony Corp. might just announce it at the Expo along with its anticipated PS compatible VR headset. However, there has been no update on Nintendo’s Wii U as the company has been reluctant to disclose any information regarding its new console, points out CNBC.

If E3 2015 was about big titles like Star Wars Battlefront and Fallout 4, this year’s E3 will have titles like Nintendo’s The Legend of Zelda, Ubisoft’s Watch Dogs 2, DICE and EA’ Battlefield 1. Activision in collaboration with its console partners will launch Call of Duty: Infinite Warfare. Apart from these, we will also have Take Two Interactive’s Mafia III.

2. Blizzard Entertainment, a subsidiary of Activision and Facebook have struck a deal whereby gamers can use their Facebook login to access Blizzard Entertainment’s PC games, be it its latest release, Overwatch or other popular titles like World of Warcraft, Heroes of the Storm, Hearthstone, Diablo III, and StarCraft II from the backhalf of this month. Moreover, for long term gains, Blizzard Entertainment said that it is also in the process of “incorporating Facebook’s Live API in order to create its own “Go Live” streaming functionality for its games.”The collaboration will result in Blizzard’s games gaining more exposure as a result of Facebook’s gargantuan user base of 1.65 billion. As for Facebook, the deal with an AAA rated video game publisher will enhance its platform capabilities by making “high-demand entertainment content” available on its platform. Blizzard Entertainment and Facebook have already hosted a lot of live stream events including Heroes of the Dorm and the Overwatch launch event.

Performance

The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:

Company

Last 5 Days

Last 6 Months

ATVI

-2.03%

-0.13%

EA

0.73%

13.65%

GLUU

-3.77%

-21.23%

MSFT

-1.34%

-6.11%

NTES

-2.45%

-2.85%

TTWO

2.01%

11.21%

ZNGA

0.77%

2.75%

 

 

 

 

 

 

 

 

 

 

 

 

 

Over the last five trading sessions, Glu Mobile was down 3.77% while Take Two Interactive was the highest gainer, up 2.01%.

Over the last 6-month period, Electronic Arts surged the most — nearly 13.65%. Increasing digital revenues and continued strength in Star Wars Battlefront sales were the primary catalysts. The company sold 14 million units of Battlefront in the last fiscal year. Going ahead, we believe that a strong pipeline of new releases, which include a brand new Battlefield and Titanfall game along with Mirror’s Edge Catalyst will fuel top line growth.

However, Glu Mobile was down 21.3% over the same time frame due to underperformance of most of its releases. But strong first quarter results, share repurchase authorization and its new Britney Spears and Taylor Swift game should make investors happy.

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